Ottawa must act now to protect land in the Northwest Territories if it wants to see a $16-billion natural gas pipeline built down the Mackenzie Valley, a major Dene First Nation said Wednesday.

CALGARY–Ottawa must act now to protect a vast swath of land in the Northwest Territories if it wants to see a $16-billion natural gas pipeline built down the Mackenzie Valley, a major Dene First Nation said Wednesday.

Dehcho Grand Chief Herb Norwegian said there will be no pipeline if the federal government doesn't adopt the Dehcho land-use plan that calls for about half of its lands – or about 20 million hectares – to be protected from development.

"It's the plan first and then the pipeline second," Norwegian said at a news conference in Calgary.

A coalition of environmental groups is backing the Dehcho plan, arguing that it's a critical step to protecting an area still largely untouched by industry.

Norwegian says Prime Minister Stephen Harper's government is now balking at a tentative deal arranged by the former Liberal government and is trying to link it to ongoing land claim negotiations with the Dehcho.

"Canada seems to be dragging their heels and reneging on all the previous agreements that they've made."

An interim agreement signed in 2001 between the federal government, the Northwest Territories and the Dehcho set aside an area more than twice the size of New Brunswick to be protected from development.

The Dehcho say the remainder of their territory, including most of the areas of interest to oil and gas companies, would be open to "well-regulated" development.

Norwegian said Wednesday that if the federal government refuses to endorse the land-use plan and tries to go ahead with the pipeline anyway, the Dehcho have a legal strategy ready. They would also look at "direct action" where people would "defend themselves" and take steps to stop development.

The Dehcho are the largest aboriginal group opposing the massive project and lay claim to land that covers about 40 per cent of the proposed pipeline route.

They have been involved in land-claim negotiations with Ottawa but say the land-use plan should not be tied directly to those talks.

A spokeswoman for Indian Affairs Minister Jim Prentice said he hopes to be back at the negotiating table "in a matter of weeks."

"We have indicated to the Dehcho that we're willing to work on the land-use plan with them in order to find a satisfactory solution for all sides," Deirdra McCracken said from Ottawa.

"We, the Government of Canada, continue to believe that the place to resolve these issues is at the negotiation table – not in the media."

Last month, the consortium proposing to build the Mackenzie pipeline announced that estimated costs for the project had soared to $16.2 billion – up from an original $4 billion.

The Mackenzie pipeline group includes Imperial Oil (TSX: IMO), ConocoPhillips (NYSE: COP), Royal Dutch Shell (NYSE: RDS.A), ExxonMobil (NYSE: XOM) and the Aboriginal Pipeline Group, which consists of most of the other major First Nations groups in the Northwest Territories.

It also pushed the expected completion date back three years to 2014, due to delays in permits and approvals.

Imperial spokesman Pius Rolheiser said the land-use issue has a potential to affect the pipeline, but the companies were watching from the sidelines.

"This is very much an issue between the Dehcho First Nation and the federal government."

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